Decision Maker:

Outcome: For Determination

Is Key Decision?: Yes

Is Callable In?: Yes

Date of Decision: October 7, 2024

Purpose:

Content: RESOLVED:   1.  To approve the award of contracts to the recommended skilled and experienced contractors to deliver lift servicing and repairs to residential lifts across the Hackney housing stock. Note the award of two contracts in regions, East and West.   2.  Note the award of two contracts in regions, East and West:   Lot 1: Lift Maintenance Contract for Servicing and Repairs - East Area. The contract term is a five-year contract with an option to extend for up to a further 5 years (5 years +1+1+1+1+1). The total maximum value for up to £27.9m in total across the potential 10 year period. This contract will be awarded to Supplier A.   Lot 2: Lift Maintenance Contract for Servicing and Repairs - West Area. This is a five-year contract with an option to extend for up to a further 5 years (5 years +1+1+1+1+1). The total maximum value for up to £27.9m in total across the potential 10 year period. This contract will be awarded to Supplier B.   3.  Note; an annual report on the performance of these contracts, as well as the tracking of the social value commitments will be presented to the Hackney Procurement Board.     Reasons For Decision   1.  The proposed lift repair and maintenance contracts are required to ensure that Hackney Council meets its statutory requirements as a landlord and ensures the safety of its residents. In addition, it will ensure that lifts are out of service for the minimum time possible. The contracts will enable Hackney to achieve its objective to undertake reactive repairs and maintenance within its significant lift portfolio thus minimising lift ‘out of service’ times, the inconvenience to residents and ensuring confidence in residents where lift assets are concerned. This contract would avoid significant statutory and reputational impact of not having a suitable lift contractor in place. The procurement of a lift contract can be considered of high risk to the Council. 2.  The current interim contractual arrangement was put in place in June  2021, and is currently being delivered by Apex Lifts Limited. This contract was established to allow PAM to cover the interim period while a new Lifts Repairs framework was being procured. This interim arrangement has been extended via a Single Tender Action on three occasions. The latest STA will end on the 22nd of January 2025. 3.  The proposed approach has two geographical areas, namely; East and West. The rationale behind the split is that it enables greater resilience for the Council and provides some insurance against supplier failure. The contract will be drafted to enable one contractor to take some of the work outside their allocated geographical area if the other contractor is not performing. 4.  Careful consideration has been given to the appropriate length of the contract. In reaching the conclusion thought was given to ensuring that Hackney could build a beneficial long term relationship with the successful bidders and the opportunity to ensure value for money as well as contain future procurement costs. As a result, the contracts are for an initial term of 5 years with an option to extend up to a further 5 years in annual increments.     Alternatives Considered and Rejected   Option 1 - Let multiple 10 year Term Contracts   Consideration was given to using multi-supplier (more than two) longer term contracts for these works as part of this procurement exercise. These contracts have significant advantages, including delivery efficiency savings, increased social value and greater certainty for supply chain partners.   However, such contractual arrangements take a significant amount of time from developing initial proposals to contract mobilisation. In the absence of an existing arrangement, it is imperative to implement a solution in a much shorter time-frame. For this reason, it was concluded that this option is not as viable as others identified, and, therefore, rejected.     Option 2 –  Letting one Term Contract   The option of letting a single term contract was considered.  However, this was quickly discounted because of the lack of an alternative contractor should they not perform or should they cease to exist. In addition the lack of recent capital investment has meant that there is likely to be a higher than average need for repair with the lifts stock. It was also believed that the quantum of repairs required would be too much work for a single contractor to undertake. It was concluded that this option is not as good as others identified, and, therefore, rejected.   Option 3 - Insourcing the entire contract   Technical resources with very specialist qualifications would be required for the lift servicing and maintenance.  There is very limited time available to scale up to recruit such a team and it  is not clear this would be possible. The specialist nature of lift parts would also require the council to put in place new supply chains sufficient to cover the wide range of brands and types of lifts in the borough. This is likely to be prohibitive and presents a very significant risk to successful lift repairs programmes.   A further barrier is that it is not possible to consult with leaseholders on the appointment of the DLO.  This would mean that works subject to a Section 20 notice (above £250/unit) would not be fully rechargeable without additional procurement work, or a dispensation from the First Tier Tribunal (which is unlikely to be forthcoming).  This would be too significant a financial loss to the council as would not allow to recover costs incurred.   This option would also mean that the council would take full responsibility for the health and safety of operatives which is a very significant risk for the Council.   Option 4 - Appointment via an External Framework   Due to the requirement for leasehold engagement, the strategic nature, value of the contract and specialist area, an external framework is not deemed to be a suitable option for this requirement.  For these reasons, it was concluded that this option is not as good as others identified, and, therefore, rejected.